Brexit has major implications for NZ sheepmeat and beef trade

Beef + Lamb New Zealand (B+LNZ) and the Meat Industry Association (MIA) of New Zealand are concerned about the future of New Zealand’s sheepmeat and beef exports to the UK and the EU following the UK’s vote to leave the EU.

“Our sheepmeat and beef trade to both the UK and EU are inextricably linked through quota access and both are likely to be affected,” said Sam McIvor, B+LNZ chief executive.

The EU is New Zealand’s most valuable market for red meat and associated co-products, accounting for over NZ$2 billion in trade last year.

New Zealand’s sheepmeat quota to the EU of around 228,000 tonnes represents over half of New Zealand’s sheepmeat exports. The UK currently takes half of that.

“As the UK negotiates its exit from the EU over the next couple of years it will likely be negotiating how much of these quotas will be transferred solely to them and on what terms,” said Tim Ritchie, MIA chief executive.

There will be no immediate change to the export conditions to the UK and the EU as the UK will not officially leave the EU until they negotiate the terms of their ‘exit’.

“It will be B+LNZ and the MIA’s top priority to work with the New Zealand Government to ensure New Zealand’s access to the EU and UK is protected during this transition. We will also be working hard to understand the wider impact of Brexit on the markets. The New Zealand Meat Board and B+LNZ will be using their offices in the UK and EU to assist with this,” says Ritchie.

“Under World Trade Organisation rules, New Zealand expects that our overall levels of sheepmeat and beef access to both the EU and UK will remain the same,” said Sam McIvor.

“What is unclear is the impact on the market dynamics in each of the UK and remaining EU market envelopes,” said Tim Ritchie.

The UK is a major agricultural producer and much of this production currently goes to the EU under zero duties. Last year 90 percent of the UK’s sheepmeat exports went to the EU. If the UK loses its preferential access under Brexit, there will likely be over-supply in their own market, dampening demand for imports from New Zealand.

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